Sp Group A/S

Hi, and good afternoon. On behalf of Hans Christian Andersen Capital, I'd like to welcome you all to this presentation of the Q1 2026 report from SV Group that was published yesterday. My name is Hans Christian Andersen and I have the pleasure of welcoming CEO Lars Bering and CFO Alan Jeppesen. They promised to take us through the numbers and recent highlights, so a warm welcome to the two of you. And before I hand over, I'd also like to give a warm welcome to all of those of you who signed up for today's presentation. As usual, you can ask questions during the presentation in the chat room on the lower right corner. And we are also recording this presentation and will publish it on different platforms afterwards. With that, I'll turn off my camera and we're back for the Q&A. But for now, I'll leave it to you, Lars and Alan. Please go ahead.

Thank you very much, Rasmus, and welcome, and thank you for joining SP Group's presentation of the interim report for Q1 2026. My name is Lars Bering, and I'm CEO of SP Group.

And I'm Allan Jeppesen, CFO of SP Group.

And together with Søren Ulstrup, we make up SP Group's Executive Board. And we will start today with a brief introduction of SP Group for you. joining us for the first time, followed by a review of Q1 2026, where we have set nice records in several areas. Alan and I will be sharing the presentation today, and we will be supplementing each other along the way. FP Group develops and produce and sell plastic solutions for a wide range of industries. Our focus is technical components, typically single-use products for the healthcare sector, plastic components that is integrated into our customers' products and used for many years. In Q1, 2026, 76% of our revenue came from sub-supplier work, and 24% came from our own products. We have a global setup with 33 factories, and almost 2,800 employees. And finally, we are focused on increasing the share of recycled plastic in our production. We have reached 18% and have a target to reach 25% in the year 2030.

And as you can see on the right side of the screen, our revenue is distributed across several product groups. Thirty-five percent of the company revenue is generated within the product group healthcare. Healthcare is including medical devices, medical packaging, as well as economic products. The second largest group is the clean take, which covers products as renewable energy, energy reduction, and insulation. The third is FuelTech, which has a share of 14% of our revenue. Within this product group, you'll find livestock housing ventilation systems and different measuring equipment, or products to different measuring equipment. The remaining categories, the remaining products fall in under the category Other, which covers 22% of our revenue. Within this products group, you find furniture, you find special vehicle products, and also products for the defense industry. We will return later on regarding the performance of each of these segments.

Yes. An SP group is organized into a number of independent units, each owning their customer relationship and their technology and their products. The light green ones On the left-hand side is our proprietary products, which are products, niche products, that are sold in our own brands. That includes the companies Ergomad, SP Medical, MedicoPak. On the right side, you see the subcontracting companies where we have SP Molding doing injection molding. We also have SP Tenbu doing composites. With the acquisition of the depot, we have added new capabilities. within EPP, APS casting, light metal casting, and tool making. The decentralized structure enable us to be close to the customers, have fast decision making, and agility in the day to day operations. And then we are actively working on great synergies across the group, especially on procurement, knowledge sharing, and cross sales.

Here you see our global footprint. SP Group is present in 13 countries, providing a strong global footprint where the international diversification creates a good foundation for growth and reduces the dependency on individual markets. Of the 13 countries, we are currently having manufacturing operations in nine with, as Lars mentioned before, 33 factories. As shown on the world map, Asia is representing 10% of the group revenue, North, South America 16%, Europe 47%, and Denmark 27%.

And then let's look at the highlights for the quarter. It has been a very strong quarter. Q1 was a record-breaking quarter with a revenue growth of 22.9%, of which organic growth accounted for 11.3%. We managed to reach an EBITDA margin of 20.4% and an EBT margin of 13%. Overall, the best quarter in our history.

Well, at the same time, we are confirming our full year 26 guidance. We still expect revenue growth in the level of 15% to 23%, an EBITDA margin in the level of 19% to 21%, and EPG margin of 11 to 13%. Later today on this presentation, we will address the basis of our guidance, both in relation to the record result in Q1, but also the geopolitical challenges from the current situation in the Middle East.

Yes, and beyond the financial highlights, there are a number of important operational milestones I think that is worth to highlight. There's been a solid growth in both our own products and in our subcontraction work. And we are well on the way with the expansion of the medical production in Poland, and the construction is progressing well. At the same time, the collaboration with the new team in Idepo came off with a good start. On the picture on the right-hand side, you see our solar park, Hope Solar Park is now operational, is producing green, clean electricity for SP Group. All of this we will explain more in details on the coming slides. Sales of our own products increased by 4.1% to 235 million kroner in Q1, which was a new record. There's a strong growth in sale of components for livestock ventilation, while the development in economical products were flat. On the same time, MedicoPak's packaging and the Guidewire sales declined a little bit. For MedicoPak, it was significantly impacted by a customer's decision to phase out a product and leave this market entirely. On the Guidewire sales, it reflected a focus on high-margin products so we make sure that the capacity is used in the best possible way. Moving to subcontracting orders, here we saw a very strong development in Q1. Revenue from subcontracting increased by 30.5% to $731 million. This was driven both by organic growth and contribution from EDCO. The growth reflects high activity on all customer segments that Alan will tell on more about a little later, but particularly strong growth in both clean tech and food tech. We are pleased that many new customers have chosen SP Group to solve plastic tasks with help to grow in the future as well.

Well, the performance across our product groups is shown on this slide. At the top, you can find the share of the revenue on each of the product groups and also with examples of what is included in each of the groups. Below, you see the development, the revenue development within the four groups. It's a comparison of Q1 2025 with Q1 2026. As the figures show, all four product groups have delivered positive growth, and it is worth mentioning that this growth actually comes on the top of records back in 2.1.2025. The healthcare category is in several respects project-driven, and timing can impact individual quarters We have seen a strong influx of new customers and products in this segment, which we expect to materialize in the coming quarters. The pipeline in this area is active and remains very strong. The remaining product categories have grown between 33 and 64% in Q1. A growth driven by a strong combination of the acquisition of IDECO back in December 25 and a very solid organic growth across individual product groups.

Yes. And the expansion of a new clean room in Poland is well on the way. We are building this inside the house. You can see on the picture here on the right-hand side. We are converting an existing building of 7,000 square meters into a building for medical production with a focus on capacity, efficiency, and better space utilization. A new 1,700 square meter clean room is expected to be ready by end of Q2 2026, and this investment is very important for us to be able to deliver on existing agreements and new agreements that will start to give work here in the coming months. The integration of eDEPO is also on track. eDEPO became a part of SP Group just before new year and we are very busy introducing our teams to each other and to detail plan all actions in the integration. eDEPO has production facilities in Skive and Grameur in Denmark, and as well as in Bangalore in India. And the company employs around 325 people. Their capabilities span injection molding, light metal casting, and molding in EPP and EPS. The focus is on prototypes and low-volume production. Cross-selling is well underway. We are already seeing concrete examples of existing SP customers requesting EDPoS capabilities and vice versa. And in addition, we are planning an expansion of the factory in India to support future growth. All in all, we are very pleased with the integration and how it's progressing.

Well, let's take a closer look on the financial results of 2021, 2026, all of which have developed positively during the last three months. The four metrics you see on the screen illustrates the performance within revenue, within the operating result, EPGA, EPG, and EBIT. If we look at the revenue, you will see that we have 966 million realized actual in the first three months of 2026, which actually is a growth of 22.9%, placing us in the upper end of our full year revenue guidance. We touched briefly on the positive performance across the product segments earlier, growth that was both driven by organics and growth from acquisitions. We are very pleased to note that organic growth have accounted for approximately half of the total growth in Q1. To be more precise, actually 11.3%. Measured in local currencies, the growth was in fact 13.6%. This also confirms that the ID Pro is on track and contributes with 11.6% of the growth which was anticipated and budgeted. Well, turning to the EBDA, we again see a positive trend where we are pleased to report a growth of 18.5% compared to Q1 last year. The EPDA margin came in at 20.4%, which is within the guided range for the full year, and actually 0.2% point ahead of the full year, financial year 25. Earnings before tax for Q1 increased by 24.2%, 225 million, another record high result. On this slide, you see development within the operating cash flows, the earnings per share, and below those, you see the interest-bearing debt and the development in equity. The strong operating results is also reflected in the cash flow from operating activities, where we generated 159 million in Q1, an improvement of 28 million compared to Q1 last year. In 2025, our interest-bearing debt increased as a natural consequence of the acquisition of EDPRO at the end of December 2025. In Q1, we, as expected, has reduced our net interest-bearing debt, which at the end of March was 1.388 billion. The leverage method as net interest-bearing debt to EBITDA was at 2.2 times end of March 26. Yes.

SP Group has grown consistently since the financial crisis, both organically and through acquisitions. The compound annual growth rate over the period is 8.9% based on the last 12 months. We have completed more than 20 major and minor acquisitions in the period and actively participated in the consolidation of the plastics industry. We are convinced that this approach, a combination of organic growth and strategic acquisitions will continue to be a part of our growth strategy. Over the past 10 years, we have improved our EVDA margin from 14% in 2016 and now to 20%, an improvement of six percentage points. The margin improvement has been achieved through a sustained focus on three drivers. First, an increased share of our own products. These products are very important for us because it is these plastic products that we are able to maintain a larger or higher margin zone compared to our subcontracting work. Second, we have increased the production in Eastern Europe, which strengthens our competitiveness. And third, we have increased automation in our production. We expect that all three drivers will continue to contribute positively to the margin development going forward. The same picture applies to the EVG margin, which has been lifted from 8% in 2016 to 11.8% in the most recent 12 months. EVG growth in Q1 2026 was 24.2%, even stronger than our EVGA growth. And overall, seeing the market improvement has been driven over the years by the same three factors. Increased share of home products, increased production in Eastern Europe, and automation. And our vision is very, very clear. We aim to be the best at producing plastics with a strong competitiveness, and healthy profitability. This requires a very good mix between the subcontracting orders, where we are continuously trying to improve our processes, and then on the other hand, having our own products where we create innovation and we are able to have higher margins.

Well, this slide provides an overview of the key financial figures, several of which we have already covered on the previous slides. We briefly touched on the cash flow from the operation, which has contributed positively to the change in our liquidity. Actually, we have had a change of plus 27 million, which represents an improvement compared to last year of 61 million. On equity, you can see that we end March was at 1,865,000,000, which is equal to an equity ratio of 45.5%. And that ratio is in line with the most recent quarter we have seen. The remaining key figures on the slides, you are more than welcome to address any questions to those on the Q&A later. Well, in addition to the strong financial performance and several positive highlights mentioned by Lars. We also held our annual general meeting, which took place yesterday. At the AGM, a resolution was passed regarding the payment of dividends and a reduction of the share capital. The approved dividend amounts to four Danish kroners per share. which is equal to an 8.7% of the net profit in 25. This is aligned with the group capital allocation policy, which is between 15 to 25%. A resolution was also passed to reduce the company share capital by a nominal 780,000 Danish, through the cancellation of a total of 390 shares, shares which SP Group already holds in treasury. Following the reduction, the share capital would amount to a nominal of 24.2 million. Historically, SP Group has conducted active share buyback programs on several occasions, and we have decided to continue this practice. We have initiated a new share buyback program which will run from May 4th this year to end of December 26th. The total buyback program amounts to 40 million Danish kroner.

We cannot ignore the current situation in the Middle East. The conflict is leading to increasing raw material prices and increasing energy prices in general. And we are in very close dialogue with both customers and suppliers to navigate through the situation in the best possible way. The majority of our energy consumption is green electricity, where prices are fixed. And on the raw material side, we have been doing a big job trying to push back the increases and where the price increases are documented and real, here we are passing them on to our customers. However, there's a certain delay on that because no one welcome a price increase and everyone tries to get rid of them initially. There's also a geopolitical uncertainty And that is the reason why we are maintaining our guidance for 2026.

Well, as Lars mentioned, we are maintaining our 26 guidance, and it is important here to emphasize that we are doing so in light of the current geopolitical uncertainty, but in spite of it. Q1 was record strong and came in at the high end of our expectation, but we are taking a cautious approach as the conflict in the Middle East continues to have the potential to impact both demand, commodity prices, and supply chains. We expect a revenue growth in the level of 15 to 23%, driven by new products, new customers, growth within existing customers, and also, of course, the contribution from the acquisition in April. The EBITDA margin is expected in the range of 19 to 21%, and the EBT margin in the range of 11 to 13%. We have had a strong start to 26, and the underlying business remains strong.

Yes, and then let me sum it all up. Q1 was a record-breaking quarter with revenue growth of 22.9%, with strong organic growth of 11.3%. We are seeing growth in both our own products and our subcontracting work. The integration with EDPO is in full swing with cross-selling and planning of capacity expansion in India. We are handling the rising of raw material prices resulting from the conflict in the Middle East. Increases are being passed on to customers on an ongoing basis. and we maintain our guidance for 2026. We have initiated a new share buyback program for 40 million, and 390,000 shares will be canceled. The underlying business, as Alan said, is very strong. SP Group is ready for continued growth. Thank you for your attention. We are ready for questions.

Thank you, Lars and Alan, and I'll be joining here with the camera to do the Q&A session here. I think we'll move a little bit back on your slides to this overview slide, so there's a few questions related to this one. There is one first here, 22.9% growth, as we can see here on the slide as well, and of those, 11.3% organic growth. What gives you the confidence in your order book for the rest of the year? And could the other end of the 15% to 23% range be in play?

We think, as Alan said a minute ago, that there's a lot of uncertainty on how things will develop. We have had a very good Q1. We are having a good order book as we speak. However, prices are increasing. We are seeing some disturbance in supply, but not anything else that it is giving us trouble. But the picture is also blurry. It's difficult to guess what is going to happen in the second half of the year, and therefore we are cautious. to say that things will keep on being as nice as they are right now.

Good. And a question on the EBITDA margin. It says here it slips to 20.4% from 21.1%, despite the record top line. Is that ED-pro dilution? Is it raw materials, the U.S. Rambot, or a combination of the three?

This is a question of product mix when you compare Q1 to Q1 25 to Q1 26. If you make a comparison with the full year of 25 and not only Q1, as mentioned, we have actually had a growth of 0.2% to 20.4%. Exactly.

A big part of it is that the depot is coming in with a lot of subcontraction work, diluting the share of our own products a little bit, and our own products has simply delivered higher margins, and therefore it has changed a little bit.

Good. And also looking at sort of M&A, there's a question here, as we can also see on the slide here, that your leverage is already down from 2.5 in the 25 to now 2.2 at the end of the quarter. You're only three, four months down the road with the day, but is this level making you comfortable doing more M&A, and could you give a little brief on the M&A pipeline at the moment?

We are always looking for interesting MA opportunities, and we have a list of candidates that could join the SP family over time. So this is continually something that we work with. For sure, we see that 2.2 is an okay area to be in to do more acquisitions, but on the other hand, we also like the fact that we were able to do the acquisition and after the acquisition not being more than 2.5. Having said that, if the right opportunity arises, I'm sure we are going to find a way to make it succeed without jeopardizing anything in the business.

Good. And also looking a bit on this slide, we can't see it directly, but if you look at the capital expenditures, you can see it from the report, and of course it's part of the investing activities here, but in Q1 last year, it was $58 million, and it 48 millions in the last quarter here. I was just wondering, you're both ramping up on Atlanta, on Poland, and is this 48 level a run rate from here, or do you think we should see capex go up in the coming quarters?

Well, we actually believe that we are at a level we are going to see the coming quarters We have had very little exposure on currency, but we have had a positive impact in Q1 compared to Q1 2025, where we had a small negative impact from currency.

Good. And also looking at the U.S., Atlanta keeps ramping up with new machines on the way. Are you seeing customers actually shift volumes to the U.S. because of tariffs? And could you sort of give us a general update on the tariff situation?

On the tariff situation, then here we are already in progress trying to get some of them back. But on the production side in Atlanta, we are very busy. Production is running 24-7 on the machines that we have. And we have a good plan for the rest of the year to put in many more machines in the plant where we already have made agreements. Yes. Yes.

Good. And the last question here, I'll just switch to this slide on the way in the Middle East. You are flagging rising raw material prices and some delivery issue. Have you seen any effect on this in Q1 on your growth that sort of clients and your customers are pulling forward orders because they expect price hikes later on in the year? Have you seen any effect on that?

Overall, no, not in Q1. The flow from orders to raw material is typically some weeks, and with this happening in the Middle East in March, the impact here cannot, if any, have been very, very big. We have had a very good dialogue in March and also in April with both suppliers and customers in order to secure raw material and keep production high for the coming month. But of course, this could also have an impact later on if the situation does not resolve.

Very good. That will end today's presentation. Thank you very much, Lars and Alan, for joining us here today.

Thank you, and thank you to all of you who have been listening in.

Thank you very much, and have a nice day.